End of contract broadband rules saving customers money

Around two thirds of broadband customers nearing the end of their contracts in 2020 acted to save money compared to 47% the previous year.

Securing a better deal can save customers on average £5.10 per month, with the number of out of contract with their provider falling to 35%.

However, Virgin Media customers are still the most likely to remain out of contract.

Better deals

Rules forcing broadband providers to notify customers when their broadband contracts are coming to an end has resulted in better deals for 1.3 million households.

62% of customers who were coming to the end of their broadband contract in 2020 either signed up to a new deal from their existing provider or switched to another ISP when their contract was up.

Ofcom also say:

• Two thirds of customers who received an end of contract notification remembered getting it
• 90% who remembered receiving one found it helpful
• A fifth of these customers say the notification prompted them to take action they would not otherwise have taken

The average prices that customers paid for broadband fell in 2020 to £38.10 from £39 the year before, with average broadband speeds increasing over the same period to provide better value for money.

Find out exactly how to end a broadband contract in our updated guide.

ISPs

Ofcom analysed data from six major broadband providers to see how many of their customers were out of contract in 2020 compared to 2019.

Overall, 35% of customers across all providers were out of contract with their ISP in 2020, a decrease from 40% the previous year. However, some providers had lower figures than others:

1. EE - 21% (down from 24%)
2. BT - 28% (down from 30%)
3. TalkTalk - 29% (up from 25%)
4. Plusnet - 31% (down from 42%)
5. Sky - 32% (down from 42%)
6. Virgin Media - 52% (down from 61%)

The biggest reductions came from Plusnet and Sky while TalkTalk's figures went up year on year and more customers were out of contract in 2020 than in 2019.

Yet Virgin Media's proportion of customers out of contract remains stubbornly high, with more than half of their customers on rolling contract.

While this was a reduction on the 61% seen the previous year, it's likely an indication that customers who feel they can't get a comparable speed deal from another provider in their area aren't inclined to switch or try and recontract with their ISP.

This situation could change as other networks like Openreach and CityFibre extend into Virgin Media territory over the next few years.

Fairer deals

The purpose of Ofcom's rules on end of contract notifications that came into force in February 2020 was to ensure customers received a nudge when their bills were going up.

Such notifications will include information such as the date a contract is up, what the price is currently and what it will be after the minimum term ends, what the notice period for leaving is and what the provider's best deals are.

From Ofcom's data, it seems that 1.3 million homes have saved money and secured a better deal thanks to the notifications and it's positive that 90% of those who remember receiving them found them useful.

Even so, the fact that 35% of customers are still out of contract with their broadband provider and are spending more money than they need to each month on broadband services is frustrating.